Indian e-commerce firms could turn into single-brand retailers

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Indian e-commerce firms could turn into single-brand retailers
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Some Indian e-commerce firms, like Urban Ladder, Zivame, FabAlley and Yepme, are considering turning into single-brand retailers so that consumers can buy from their stores without foregoing their foreign investments.

It was in November last year that the government had amended its single-brand retail policy to allow foreign-funded retailers to sell products through both brick-and-mortar and online stores.

"Now that full clarity has emerged in single-brand policy, we will certainly look at it," Yepme CEO Vivek Gaur told ET. "We don't need to do everything from ecommerce to brick-and-mortar stores ourselves but it gives flexibility to pick whatever we want to do," he added.

As per the policy, India allows 100% FDI in e-commerce marketplaces, however, such marketplaces can’t stock or sell on their own. They can only lend their platforms for retailers to sell products.

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When these online retailers re-model their businesses into single-brand operation, they would be able to hold and sell their own inventory online, without breaking any of the FDI regulations.

"Currently, we are funded by Indian angel investors. As and when we get foreign money, we will definitely apply for single-brand licence," said Shivani Poddar, cofounder of the Bengaluru-based fashion start-up FabAlley.

As per industry experts, companies are right in leveraging on their brand equity by going mono brands.

"It creates a differentiator, and, second, there are not large brands, so it is a fantastic opportunity for companies like Zivame to capture that space," said Nitin Chhabra, CEO at e-commerce consultancy firm Ace Turtle.

However, not all online players are in for this option. Limeroad and Voonik, for example, said that they want to maintain their marketplace models, thus allowing other retailers to sell their products using these platforms.

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